What are the pros and cons of a Limited Liability Partnership (LLP)?

In Singapore, a Limited Liability Partnership is a kind of business entity where two or more partners incorporate a partnership. This partnership protects the co-partner from liabilities of misconduct or negligence of the other partner or a group of partners.

Such an entity has its own several pros and cons:

Pros:

• The partners are all separate legal entities. So any misconduct or wrongful act by another partner won't affect one another. However, a partner, if found guilty, is liable for his own wrongful doing or misconduct.
• There is no annual return filing required except for IT filing.
• Compliance required from a Limited Liability Partnership is simple when compared to the other private limited companies.
• Change in partners won't affect the LLP.

Cons:

• Ownership cannot be transferred easily.
• There are no corporate tax benefits.
• You wouldn’t always require the consent of all partners to sign an agreement.
• If you do not have a minimum of 2 partners at all times, the LLP is dissolved.